Energy Conservation Standards f

Commercial Unitary Air Conditioners and 

ANOPR Public Meeting

NOPR Analyses and Next St

Building Technologies Program

Office of Energy Efficiency and Renewable E

U.S. Department of Energy

September 30, 2004

EE-RM-STD-01-375 COMMENT 25K
NOPR Analyses Flow Diagram

Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Revise ANOPR Analyses

Employment

Impact 

Analysis

EE-RM-STD-01-375 COMMENT 25K
Revise ANOPR Analyses

ANOPR Analysis Action

Engineering Analysis • Consider ANOPR commen

• Revise using latest data

Life-Cycle Cost and Payback Period Analyses

• Consider ANOPR commen• Revise using latest data• Conduct LCC Sub-Group A

National Impacts Analysis • Consider ANOPR commen

• Revise using latest data

EE-RM-STD-01-375 COMMENT 25K
Customer Sub-Groups 

(ANOPR Issue #14)

The Department seeks comments on building charabe used as an indicator of annual revenues in order smaller businesses.

Smaller businesses have been identified as a possible analyzed for the NOPR in the LCC Sub-Group AnalysisThe Department does not have annual revenues for bubuildings analyzed in the LCC analysis. 

EE-RM-STD-01-375 COMMENT 25K
NOPR Analyses Flow Diagram

Manufacturer

Impact

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Revise ANOPR Analyses

Employment

Impact 

Analysis

EE-RM-STD-01-375 COMMENT 25K
Selection of Trial Standard Lev

 Purpose

• To develop a list of standard levels from which impacts a

proposed standard level is selected

– Each trial standard level consists of a set of potential mi

covering all product classes, and may vary between pro

– NOPR analyses assess impacts for trial standard levels 

 Method 

• Trial standard levels are assembled from the product clas

ANOPR

– Candidate standard levels cover a range of efficiencies 

 Most energy efficient level (max tech) Efficiency level with the lowest life-cycle cost Efficiency level with a payback period of three years o

 Efficiency levels with noteworthy technologies

 Efficiency levels that fill in large gaps between candida

– Each trial standard level consists of the candidate stand

product class that meets one of the above criteria

EE-RM-STD-01-375 COMMENT 25K
Trial Standard Level Criteria

A critical part of the NOPR analysis on which the Departearly guidance and input.

• Trial standard levels are created from combination

standard levels at a product class level.

• Based around a consistent theme, such as lowest l

payback in 3-years or less. 

The Department seeks comments on the criteria for Standard Levels.

EE-RM-STD-01-375 COMMENT 25K
NOPR Analyses Flow Diagram

Manufacturer

Impact

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Revise ANOPR Analyses

Employment

Impact 

Analysis

EE-RM-STD-01-375 COMMENT 25K
Manu

Manufacturer Impact Analysi

 Purpose

• To assess the impacts of standards on commercial air-con

manufacturers

• To identify and estimate impacts on manufacturer sub-gro

severely impacted than the industry as a whole

• To examine the impact of cumulative regulatory burdens o

 Method 

• Analyze industry cash flow and net present value through 

Regulatory Impact Model (GRIM)

• Interview manufacturers to refine inputs to the GRIM, deve

and address qualitative issues

 Output

• Industry Net Present Value impacts• Sub-group Net Present Value impacts• Other impacts

EE-RM-STD-01-375 COMMENT 25K
Manu

Manufacturer Impact Analysis Pr

 The MIA consists of three phases

Industry profile

Develop straw-man GRIM*

Develop interview guide

Interviews

& industrywide / 

subgroup

analyses

Assempcomcumbur

Phase 1 Phase 2 P

* Government Regulatory Impact Model (GRIM)

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Manu

The MIA is both concurrent and coordinated with actthe rulemaking process. 

Phase I

Industry Profile

Phase III

Manufacturer Interviews

Revise Industry Cash Flow

Manufacturer Subgroup Analysis

Qualitative Assessment

Phase II

“Strawman” GRIM

Manufacturer Impact Analysis Other R

S

E

E

C

E

En

I

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Manu

Phase I: Industry Profile

 Collect financial and market information

• Industry reports• Company annual reports and websites• Trade journals• U.S. Census Bureau• SEC 10-K form filings• ANOPR information: manufacturer production costs

manufacturer selling prices, shipments

EE-RM-STD-01-375 COMMENT 25K
Manu

Phase II: Develop Straw-man G

 The Government Regulatory Impact Model (GRI

cash flow analysis to estimate the change in indto the introduction of new efficiency standards.

Manufacturer Prices

Shipments

Ma

Fina

Cash Flow Impacts, Changes in Industry NPV

GRIM

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Manu

Phase II: Develop Interview Gu

 A critical aspect of the MIA involves interviews wit

interview guide is sent to manufacturers in prepara

 Interview topics will include . . .

• Engineering analysis• Shipments model• Cost structure and financial parameters• Conversion costs (capital expenditures, tooling, R&D, te• Impact of other regulations / cumulative burden• Direct employment impacts• Import / Export issues• Consolidation / competitive impacts• Replacement parts or refurbishments• Impact of the standard’s effective date• Other topics important to manufacturers

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Manu

Phase III: Manufacturer Intervi

 Expected timeframe Time and personnel commitment for manufacture

GRIM, GRIM assumptions, subgroup analysis disc

 Confidentiality agreements

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Manu

Phase III: Manufacturer Subgroup A

 The subgroup analysis is a more focused version 

wide analysis.

• Work with subgroup representatives to tailor a GRIM inc

financial characteristics

• Consider and focus on issues of importance to the subg

employment, capacity utilization and cumulative burden

• Review draft findings with subgroup members during de

The Department invites comment and discussion osubgroups to be analyzed.

EE-RM-STD-01-375 COMMENT 25K
NOPR Analyses Flow Diagram

Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Revise ANOPR Analyses

Employment

Impact 

Analysis

EE-RM-STD-01-375 COMMENT 25K
Utility Impact Analysis

 Purpose

• To investigate the effects on utilities from reduced energy 

demand due to potential standards

 Method 

• Uses national energy savings results• Uses the Energy Information Administration’s National En

(NEMS) tailored for DOE’s Building Technologies Program 

 Output

• Change in electricity sales and price by region• Change in the mix of electricity generation• Change in new capacity construction

EE-RM-STD-01-375 COMMENT 25K
NOPR Analyses Flow Diagram

Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Revise ANOPR Analyses

Employment

Impact 

Analysis

EE-RM-STD-01-375 COMMENT 25K
Emp

Employment Impact Analysis

 Purpose

• To report net jobs created or eliminated nationally as a con

energy efficiency standards

 Method 

• Uses the IMBUILD tool, a buildings-sector version of the IM

output model

• Changes in equipment and energy expenditures taken from 

Savings Analysis

• Direct employment impacts taken from the Manufacturer Im

 Output

• Change in employment by sector as a consequence of new 

EE-RM-STD-01-375 COMMENT 25K
NOPR Analyses Flow Diagram

Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Revise ANOPR Analyses

Employment

Impact 

Analysis

EE-RM-STD-01-375 COMMENT 25K
En

Environmental Assessment

 Purpose

• To report environmental impacts as a consequence of new 

standards, including changes in power plant emissions

 Method 

• Energy savings results taken from the National Energy Sa• Energy Information Administration’s National Energy Mode

provides power-plant emissions

 Output

• Estimate of national emission reductions of NOx and CO2

EE-RM-STD-01-375 COMMENT 25K
NOPR Analyses Flow Diagram

Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Revise ANOPR Analyses

Employment

Impact 

Analysis

EE-RM-STD-01-375 COMMENT 25K
Re

Regulatory Impact Analysis

 Purpose

• To investigate the national impacts due to non-regulato

with mandatory energy efficiency standards

• The non-regulatory alternatives that may be considered

– No new regulatory action; early replacement; prescriptive s

credits; manufacturer tax credits; customer rebates; volunt

government procurement

 Method

• Modify NES spreadsheet model to consider scenarios. 

energy prices and escalation factors; implicit market dispurchase price, operating cost, and income elasticities; data

 Output

• National Energy Savings and Net Present Value of the 

alternatives

• Impact of non-regulatory alternatives on purchase price 

efficient equipment

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The Energy Policy and Conservation Act (EPCA

consider seven factors when setting energy cons

Factor An

1. Economic impact on consumers and 

manufacturers

Life-cycle cost aManufacturer im

2. Lifetime operating cost savings Life-cycle cost a3. Total projected energy savings National impact 4. Impact on utility or performance Screening analys

Engineering ana

5. Impact of any lessening of 

competition

Manufacturer im

6. Need for national energy 

conservation

National impact 

7. Other factors the Secretary 

considers relevant

Environmental aUtility impact anEmployment imp

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How to Submit Comments...

 Public Meeting – oral comments will be captured in th

become part of the public record.

 Written comments – ANOPR comment period open u

Reference docket #: EE-RM/STD-01-375 and/or RIN 

Email: commercialairconditioner.anopr@ee.doe.govMail: Ms. Brenda Edwards-Jones

U.S. Department of EnergyBuilding Technologies Program, Mail stop EE-2

ANOPR for Commercial Unitary Air ConditionerEE-RM/STD-01-3751000 Independence Avenue, SWWashington DC, 20585-0121

Courier: Ms. Brenda Edwards-Jones

U.S. Department of EnergyBuilding Technologies Program, 1J-0181000 Independence Avenue, SWWashington DC, 20585-0121

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